The chief executive officers of Switzerland’s top firms take home almost double the median salaries of Europe’s 100 biggest companies, according to a study by consultants Willis Towers Watson.
The Eurotop 100 study, presented on Thursday, studied the direct remuneration – not including pension or bonuses – of the CEOs of the 100 most highly capitalised blue-chip companies in Europe.
The median salary of CEOs from seven Swiss firms stood at €10.29 million (CHF11.79 million) last year (+15% on 2015), followed by Britain €7.44 million), Spain €5.63 million and Germany €5.06 million.
The Swiss companies included ABB, Credit Suisse Group, LafargeHolcim, Nestlé, Novartis, Roche Holding and UBS. Richemont, Swiss Re, Syngenta and Zurich Insurance Group were not included in the evaluation as their CEOs had not been in office for the full year or they did not provide sufficient survey data.
Last year’s overall top earner was Rakesh Kapoor, the Indian head of British consumer goods company Reckitt Benckiser, who made €14.4 million. He was followed by Martin Sorrell, founder and owner of the media and PR group WPP (€13.3 million).
Third was Sergio Ermotti, CEO of Swiss bank UBS, who took home €12.3 million, down from €13.1 million in 2015.
Joe Jimenez, the American boss of the Basel-based pharma giant Novartis, was ranked fifth with €10.8 million. He was followed by Roche CEO Severin Schwan (€10.6 million).
Last year, the median direct remuneration for all CEOs in the Eurotop 100 study was €5.4 million, down 6% compared to 2015, mainly due to lower bonuses, the survey said.
In March 2013, Swiss voters backed an initiative to curb the high salaries of what they considered “fat cat” executives.
Although shareholders of listed firms now have binding votes on remuneration packages and various types of bonuses, such as “golden parachute” severance agreements, are forbidden, the initiative doesn’t appear to have had much effect on the size of the top salaries.
However, new rules being prepared in Europe could have an impact on Swiss pay. The European Union’s new shareholders’ rights directive (SRD) requires a binding vote by shareholders on remuneration policy and a non-binding vote on the individual salaries of executives. Firms must also disclose the relationship between the highest and lowest pay packages. The directive must be implemented by June 2019.
Willis Towers Watson said its impact in Switzerland was likely to be minor.
“We nevertheless recommend that Swiss companies ensure that they are prepared by getting to grips with the new requirements in good time and reviewing their current practices,” said senior consultant Annu Walth.
Last June, a wage survey by the Swiss employees’ association, Travail.Suisse, reported a growing gap between the salaries of managers and other staff members. Between 2011 and 2016, the wages of managers increased by 17% on average, compared to 3.4% for employees. It found that between 2015 and 2016, allowances given to chief executive officers in Switzerland rose by 5%.
In 2011, the average ratio between the lowest and highest salaries in Swiss firms was 1:45; last year it had widened to 1:51.
This trend is found in all sectors of the economy, not just big companies in the finance and pharmaceutical fields, the association reported.